Acting Commissioner Orders Reviews Of Overpayments

     From KFF Health News:

The federal agency that oversees Social Security announced Wednesday that it will review the way it handles “overpayments” — money it sends beneficiaries that it later determines they weren’t entitled to receive. 

The Social Security Administration made the announcement weeks after KFF Health News and Cox Media Group reported that the agency has been trying to reclaim billions of dollars from beneficiaries, including many poor, retired, and disabled people who have spent the money and are unable to repay it. 

“Despite our high accuracy rates, I am putting together a team to review our overpayment policies and procedures to further improve how we serve our customers,” Kilolo Kijakazi, acting commissioner of Social Security, said in a news release.

Kijakazi said she had chosen a “senior official” to lead the team and report directly to her.   …

     This issue will certainly come up when there’s a confirmation hearing for Martin O’Malley’s nomination for Commissioner.   I hope that’s coming up soon. 

Initial Processing Backlogs

     Social Security has released numbers showing the backlogs at the initial level on disability claims. This is from more than six months ago but I don't think there's been significant improvement since. The situation may be worse. The processing time is expressed in days. You can click on the images to view them full size.

Rising Income Inequality And Social Security

       From Marketwatch:

When Alan Greenspan and his committee supposedly “fixed” Social Security’s funding crisis in the early 1980s, the program was supposed to remain solvent well into the 2050s.

Instead, the trust fund is scheduled to run out of money in 2034 — decades ahead of schedule. What went wrong?

Stephen Goss, who has been the Social Security Administration’s chief actuary for more than 20 years, posed this question recently during a retirement conference hosted by the Harkin Institute. And his answer may surprise some people.

Sure, birthrates have collapsed from the heady days of the baby boom, he said, and that trend hasn’t helped. But it’s nothing new: The big fall started in 1965, nearly 20 years before the Greenspan Commission.

And yes, people are living longer than they used to. But that isn’t a surprise, he added —actually, the decline in mortality is pretty much in line with expectations. The forecasts have proven “remarkably accurate,” he said.

So what changed? In a word: inequality.

Goss argued that rising income inequality — with fast growth at the top and slow growth everywhere else — is the mystery ingredient that has thrown Social Security’s finances into turmoil earlier than planned. And the big change took place in the 17 years after the Greenspan Commission made its projection, from 1983 to 2000, he said.

During that time, incomes for the best-paid 6% of earners rose by 62% in real, inflation-adjusted terms, he said. For the other 94%, incomes rose by just 17%.

The net result was that the lion’s share of U.S. income growth was above the Social Security cap, and wasn’t subject to the program’s payroll taxes. The percentage of incomes subject to the program’s tax collapsed from around 90% in the early 1980s to barely 82% by the turn of the millennium. …

Does "Temporary Disability Insurance" Reduce Social Security Disability Claims?

     From Does Temporary Disability Insurance Reduce Older Workers’ Reliance On Social Security Disability Insurance? by Siyan Liu, Laura D. Quinby, and James Giles:

Temporary Disability Insurance (TDI) provides workers with wage replacement while they recover from a serious medical condition. Proponents of a national paid leave program argue that these benefits allow workers to adjust to health shocks and return to the workforce, reducing reliance on Social Security Disability Insurance (DI). Yet, TDI could also encourage DI application by providing income during the lengthy qualification period. This study uses the 1992-2020 Health and Retirement Study to evaluate how access to TDI benefits affects the likelihood that older workers end up on DI after a work-limiting health shock. Specifically, it compares the experience of workers in states with mandated TDI benefits to those living in states without such policies.

The paper found that:

TDI helps workers with severe impairments stay in the labor force.

Specifically, workers who develop severe disabilities are 26 percentage points more likely to be employed and 16 percentage points less likely to apply for DI when they have TDI benefits.

However, workers whose impairments do not qualify for DI may use TDI to facilitate early retirement. ...

Click on image to view full size

     I have serious problems with this study. First, the authors didn't realize that the generally used term isn't Temporary Disability Insurance but Short Term Disability which suggests that they didn't get very far into anything other than abstruse math, such as "𝑈𝑆=𝑈(𝑤𝑆(𝐻)+𝑦)+𝜑𝑆𝐻." Second, and far more important, the authors are comparing states like New York, California and Rhode Island with states like Iowa, Louisiana and Georgia. There are major demographic and economic differences between these states that likely explain most if not all the differences they're finding. You could easily produce a study demonstrating that disability claims are more common in areas where college football is highly popular but do you think that means that following college football causes disability claims?

    In general, I'm highly, highly skeptical of those who think they can manipulate sick people into working longer. That might or might not be in their best interests but I don't think it's possible anyway. The factors that go into producing disability claims such as illness often combined with adverse vocational factors such as age and lack of work skills can't be manipulated out of the way. Even if you can get people back to work it's usually only postponing the inevitable by a few months.

Homelessness Soars Among Older People

    From Yahoo Finance:

Many baby boomers across the country are now coming to terms with the hard reality that working for your entire adult life is no longer enough to guarantee you’ll have a roof over your head in your later years.

Thanks in part to a series of recessions, high housing costs and a shortage of affordable housing, older adults are now the fastest-growing segment of America’s homeless population, according to a report in the Wall Street Journal, based on data from the Department of Housing and Urban Development. ...

Now, the over-50 demographic represents half of the homeless single adults in the U.S. — with no sign of their numbers slowing, leaving baby boomers (those aged 57 to 75) particularly vulnerable.

“Elderly homelessness has been rare within the contemporary homeless problem. We’ve always had very few people over 60 who’ve been homeless historically,” Culhane from the University of Pennsylvania told PBS NewsHour. ...

    I'm sure there are many reasons for this increase in homelessness among older people but the failures of Social Security's disability programs have to be a major factor. There are far, far too many disabled people in homeless shelters.

New Instructions On Transferability Of Skills

     The Social Security Administration has issued new instructions in its POMS manual on transferability of skills for purposes of determining disability. The sections affected are:

• DI 25015.015
• DI 25015.017 
• DI 25015.019

    At first glance I don't see anything that makes a difference but this is a sensitive enough subject that it bears a closer reading than I have given it to this point. 

    My longstanding opinion is that transferability of skills should only be found quite rarely. Those who really did have transferable skills almost certainly transferred them and didn't file disability claims.

PRW Time Period To Be Reduced From 15 Years To 5 Years

     From a notice that Social Security has scheduled for publication in the Federal Register:

We propose to revise the time period that we consider when determining whether an individual’s past work is relevant for purposes of making disability determinations and decisions. Specifically, we would revise the definition of past relevant work (PRW) by reducing the relevant work period from 15 to 5 years. This change would allow individuals to focus on the most current and relevant information about their past work, better reflect the current evidence base on changes over time in worker skill decay and job responsibilities, reduce processing time and improve customer service, and reduce burden on individuals.

    This is overdue by about 40 years but better late than never. It never made sense to tell disability claimants that they are not disabled because they can return to jobs they last held 12 years ago. Work skills just don't stick with people that long.

Good News For SSI Claimants

     From a notice that Social Security has scheduled for publication in the Federal Register:

We propose to expand the definition of a public assistance (PA) household for purposes of our programs, particularly the Supplemental Security Income (SSI) program, to include the Supplemental Nutrition Assistance Program (SNAP) as an additional means-tested public income maintenance (PIM) program. In addition, we seek public comment on expanding the definition to include households in which any other (as opposed to every other) member receives public assistance. We expect that the proposed rule would decrease the number of SSI applicants and recipients charged with in-kind support and maintenance (ISM). In addition, we expect that this proposal would decrease the amount of income we would deem to SSI applicants or recipients because we would no longer deem income from ineligible spouses and parents who receive SNAP benefits and live in the same household. These policy changes would reduce administrative burden for low-income households and SSA.

    Again, I'm not going to try to explain this. Just understand that it's good news for many SSI claimants.